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Brand Innovation – Turning ideas into Profit Finding the next big idea Carlos Michelsen – Head of NPD UK January 2008.

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Presentation on theme: "Brand Innovation – Turning ideas into Profit Finding the next big idea Carlos Michelsen – Head of NPD UK January 2008."— Presentation transcript:

1 Brand Innovation – Turning ideas into Profit Finding the next big idea Carlos Michelsen – Head of NPD UK January 2008

2 So what’s the plan? We’ll share some new product launch facts with you We’ll share what have we gained from the experience of 1000’s of concept tests

3 Old News

4 Manufacturers believe that 75% of next 10 years growth will be from additional new products Successful companies need innovations New products are vital to sustained strength and growth Source: TNS World Panel 50% of consumer products sales growth over past 10 years came from new products

5 62% of consumer products sales growth last year came from new products Innovation Source: TNS World Panel “Innovation is NOW a priority in most firms around the world just as quality was two decades ago” David Aaker

6 The Bad News

7 Introduction UK Grocery 2000 Launching winning brands has become more and more difficult

8 fail in year one of new brands Source: TNS Worldpanel

9 make more than £10m only… Source: TNS Worldpanel

10 Products can fail at one of two stages: At the concept stageAt the market We will talk about why many concepts fail unnecessarily at the concept stage

11 Are you doing your homework?

12 Weak market analysis is an important cause of new product failure Main causes of new product failure: Source: Cooper and Kleinschmidt

13 In a typical project the front-end activities receive a small share of spend % of time spend Source: Cooper and Kleinschmidt

14 Are you doing your homework? Factors that contributed to successful product Main causes of new product success: Source: Booz Allen & Hamilton

15 Are you playing it TOO safe? The case of the safe Line extension

16 Are you playing it too safe? Line extensions are the safest bet, but not the most rewarding 44 times more line-extensions but x3 smaller on average But the few “new” brand names are on average 3 times larger than successful sub- brands However, even at the concept stage New Products suffer when compared to line extensions. Purchase interest Source: TNS InnoSuite - Concept Screener™ Database

17 Are you breeding cannibals?

18 Most concepts are highly cannibalistic… Product Category Parent Share Cannibalization Index Laundry Detergent Biscuit Non carb Soft Drink Carbonated Soft Drink Coffee Dessert Household Cleaner Beauty Care Snack Ready Meals Salad Dressing Pet Food Average: 151 Median: 138 Source: TNS InnoSuite - Concept Screener™ Database

19 Going down the Uniqueness avenue Are you playing it TOO safe?

20 Consumers respond favourably to… BelievabilityBrand Fit AppealRelevance Potential Source: TNS InnoSuite - Concept Screener™ Database

21 … but for most the quest for uniqueness has lead nowhere Uniqueness Potential Source: TNS InnoSuite - Concept Screener™ Database

22 …but a closer look yields insights Uniqueness Potential So what Uniqueness Relevant UniquenessLine Extension Me too Source: TNS InnoSuite - Concept Screener™ Database

23 But why do completely new products fail to cause an impression? Up to now New Products not unique or engaging enough. Uniqueness Potential So what Uniqueness Relevant UniquenessLine Extension Me too Line extensions close Line extensions stretch Re-launches Existing products Line extensions close Line extensions stretch New products Source: TNS InnoSuite - Concept Screener™ Database

24 In short, a New product with relevant uniqueness has more than twice the potential of a “Me Too” and more than a relevant line extension New Product with relevant Uniqueness have more potential than Line extensions Uniqueness Potential So what Uniqueness Relevant UniquenessLine Extension Me too 98 Line extension - close 94 Line extension - stretch Potential amongst concepts in “Relevant Uniqueness” 100 New product Source: TNS InnoSuite - Concept Screener™ Database

25 But is it all about relevant uniqueness? Many potentially successful products are shelved because of lengthy return on investment The trick is identifying which are attractive to tomorrow’s consumers… and also willing to risk waiting Source: TNS InnoSuite - Concept Screener™ Database

26 Are you using the right stimulus?

27 Why do we still rely so heavily on concept boards? They usually simulate advertising communication…… ….but many products are launched with low or no advertising

28 The in-store environment is increasingly important to new product success? Source: TNS OnLineBus % Reasons why bought new product…

29 MONADIC VIRTUAL SHELF Purchasing from Virtual Shelf Concept Exposure and Evaluation Placement of Product with those favourable to concept How to address this Product Evaluation

30 Your new product development checklist Have you done your homework? Are you afraid of failure? Are you using the right stimulus? Are you breeding cannibals?

31 “If you’re not failing every now and again, it’s a sign you’re not doing anything very innovative.” Woody Allen

32 Brand Innovation – Turning ideas into Profit Finding the next big idea Carlos Michelsen – Head of NPD UK January 2008


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